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2021-06-22

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Confused by the Fed? So Are Markets<blockquote>被美联储搞糊涂了？市场也是如此</blockquote>

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'","highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/129146932","repostId":1152615512,"repostType":4,"repost":{"id":"1152615512","kind":"news","pubTimestamp":1624360383,"share":"https://www.laohu8.com/m/news/1152615512?lang=zh_CN&edition=full","pubTime":"2021-06-22 19:13","market":"us","language":"en","title":"Confused by the Fed? So Are Markets<blockquote>被美联储搞糊涂了？市场也是如此</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1152615512","media":"The Wall Street Journal","summary":"Swings in bond yields reveal deep confusion among investors about the Fed’s intentions and the stren","content":" Swings in bond yields reveal deep confusion among investors about the Fed’s intentions and the strength of the post-pandemic recovery. The bond market is supposed to be the smart older cousin that keeps its head while the flighty stock market zooms about all over the place. Not so much in the past week.<blockquote>债券收益率的波动揭示了投资者对美联储意图和疫情后复苏力度的深深困惑。债券市场应该是聪明的表亲，在反复无常的股市到处乱跑时，它会保持冷静。过去一周没那么多。</blockquote> Instead of a calm response to the Federal Reserve’sslightly more hawkish tone, the 10-year yield first leapt by the most in months, then plunged. On Monday, it dropped during Asian trading hours to the lowest since February, before bouncing all the way back and then some.<blockquote>10年期国债收益率并没有对美联储稍微鹰派的语气做出冷静反应，而是首先出现数月来的最大涨幅，然后暴跌。周一，该指数在亚洲交易时段跌至2月份以来的最低水平，随后一路反弹，然后有所回升。</blockquote> The moves reveal deep confusion among investors about the Fed’s intentions and the strength ofthe post-pandemic recovery, as well as the extraordinary desperation for safe yields.<blockquote>这些举措揭示了投资者对美联储的意图和大流行后复苏的力度的深深困惑，以及对安全收益率的极度绝望。</blockquote> <img src=\"https://static.tigerbbs.com/e5911d5e0ad74414b1b88185c2769f99\" tg-width=\"336\" tg-height=\"410\">Before stock traders get too smug, bond-market volatility is mirrored by similar swings below the surface of the stock market.<blockquote>在股票交易者过于自鸣得意之前，债券市场的波动反映在股票市场表面之下的类似波动中。</blockquote> For me, the most extraordinary shift was the $235 billion depositedin the Fed’s reverse repurchase facilityafter it raised the rate it pays from zero to 0.05%, because it was concerned that it was losing control of the lower bound of rates.<blockquote>对我来说，最非同寻常的转变是美联储将利率从零提高到0.05%后存入逆回购工具的2350亿美元，因为它担心失去对利率下限的控制。</blockquote> This is a true tightening of monetary policy, not the mere technicality the Fed presented it as. For monetarists who care about the amount of money in circulation, in one day it drained reserves equivalent to two months of quantitative easing, and showed just how much cash is sloshing around the system looking for even the tiniest yield.<blockquote>这是真正的货币政策收紧，而不仅仅是美联储所说的技术性收紧。对于关心流通中货币数量的货币主义者来说，一天之内就耗尽了相当于两个月量化宽松的储备，并显示出有多少现金在系统中流动，寻求哪怕是最小的收益。</blockquote> For those, including me, who prefer to focus on the price of money, it is now higher—albeit not very much, it is a tightening. Secured overnight rates in the money market had been stuck on the floor of 0.01% since March, according to the New York Fed, with some borrowing at negative rates. It rose to 0.05% after the Fed’s announcement, and negative rates vanished.<blockquote>对于包括我在内的那些更喜欢关注货币价格的人来说，现在的价格更高了——尽管不是很高，但这是一种紧缩。根据纽约联储的数据，自3月份以来，货币市场的担保隔夜利率一直停留在0.01%的下限，一些借款利率为负。美联储宣布后升至0.05%，负利率消失。</blockquote> <img src=\"https://static.tigerbbs.com/1707a50e4704c3c16d8d2eac7a0204f9\" tg-width=\"317\" tg-height=\"419\">After the initial volatility, the bond market’s considered reaction was in the right direction for tighter policy: Higher short-term real rates reduced the longer-term inflation threat and so led to lower 10-year and 30-year Treasury yields—until the reflation trade returned on Monday. Higher rates pulled down stocks most sensitive to the economy—cyclicals and cheap value stocks—until Monday’s reverse. Growth stocks did fine thanks to lower long-term rates, before lagging on Monday.<blockquote>在最初的波动之后，债券市场经过深思熟虑的反应朝着收紧政策的正确方向发展：短期实际利率上升降低了长期通胀威胁，从而导致10年期和30年期国债收益率下降——直到通货再膨胀交易于周一回归。利率上升拖累了对经济最敏感的股票——周期性股票和廉价价值股票——直到周一出现逆转。由于长期利率较低，成长型股票表现良好，但周一表现落后。</blockquote> Yet, 0.05% is a very small tightening, to put it mildly. Usually, the Fed moves in 0.25-percentage-point increments, so this was equivalent to one-fifth of a normal rate increase. What mattered for Treasurys wasn’t the immediate shift in the price of money, but the prospect of a bigger change by the Fed.<blockquote>然而，温和地说，0.05%是一个非常小的紧缩。通常，美联储的加息幅度为0.25个百分点，因此这相当于正常加息的五分之一。对美国国债来说，重要的不是货币价格的立即变化，而是美联储做出更大改变的前景。</blockquote> <img src=\"https://static.tigerbbs.com/4bacd47e561e9d7ffdb95d180913fadf\" tg-width=\"321\" tg-height=\"418\">Much of the focus was on the “dots,” the projections of individual Fed policy makers. The median prediction for 2023 was for two 0.25-point increases that year, having previously been for no move. Again, in normal times this wouldn’t be terribly significant, as the predictions aren’t binding, have been a terrible guide to future policy and anyway are still two years away. They were even dismissed by Fed Chairman Jerome Powell in his news conference on Wednesday.<blockquote>大部分焦点都集中在“点”上，即美联储个别政策制定者的预测。对2023年的预测中值是当年上涨两次0.25个百分点，而此前没有变动。同样，在正常情况下，这不会有太大的意义，因为这些预测没有约束力，对未来的政策来说是一个糟糕的指南，而且无论如何还有两年的时间。他们甚至在周三的新闻发布会上被美联储主席杰罗姆·鲍威尔驳回。</blockquote> <img src=\"https://static.tigerbbs.com/e5df90890ee96402b8d5375020d3c135\" tg-width=\"353\" tg-height=\"454\">The reason the market cared so much isn’t the specifics, but the shift in tone from super-dovish to a hint of hawk. St. Louis Fed President James Bullard emphasized this—and the market moved further—on Friday when he said the first increase could even come next year. Seven of the 18 dots had one or two rises penciled in for 2022, so the news here was merely that Mr. Bullard was one of them.<blockquote>市场如此关心的原因不是细节，而是基调从超级鸽派转变为一丝鹰派。圣路易斯联储主席詹姆斯·布拉德周五强调了这一点，市场进一步上涨，他表示首次加息甚至可能在明年到来。18个点中有7个在2022年有一两次上涨，所以这里的消息只是布拉德先生是其中之一。</blockquote> Having previously been careful not to say anything that could possibly be interpreted as worrying about inflation, the Fed suddenly seemed to be concerned.<blockquote>美联储此前一直小心翼翼地不说任何可能被解读为担心通胀的话，但现在似乎突然感到担忧。</blockquote> We will have to wait for more from Mr. Powell and other Fed members to find out if this is the interpretation they wanted. They might well be taken aback by the scale of the market moves, which on Friday briefly pushed five-year Treasury yields—the base for much corporate borrowing—up to where they stood in February last year, before the first lockdown. It wouldn’t surprise me if Mr. Powell tries to talk the market back.<blockquote>我们将不得不等待鲍威尔先生和其他美联储成员的更多信息，以了解这是否是他们想要的解释。他们很可能会对市场走势的规模感到惊讶，周五，市场走势短暂将五年期国债收益率（许多企业借款的基础）推高至去年2月第一次封锁前的水平。如果鲍威尔先生试图说服市场，我不会感到惊讶。</blockquote> The problem is that investors are supersensitive to the Fed’s views. They think the real economy will be hit much harder than it usually is by higher rates. The Fed also has spent the past year convincing investors that low rates are here pretty much forever.<blockquote>问题是投资者对美联储的观点超级敏感。他们认为实体经济将因利率上升而受到比通常更严重的打击。美联储还在过去一年里让投资者相信低利率几乎永远存在。</blockquote> The threat of higher rates holding back the economy pushed investors toward the post-2010 playbook, at least for a few days: Buy long-dated bonds, buy Big Tech and other growth stocks, steer clear of anything dependent on a strong expansion.<blockquote>利率上升阻碍经济发展的威胁促使投资者转向2010年后的策略，至少在几天内是这样：购买长期债券，购买大型科技股和其他成长型股票，避开任何依赖强劲扩张的股票。</blockquote> The shift from thinking there is no risk of rate rises to thinking there is some risk of increases marks a major change of mindset. But I urge caution: Don’t assume the Treasury market is right about inflation, let alone that the wildly swinging yield is anything more than a best guess at what the Fed plans.<blockquote>从认为不存在加息风险到认为存在一定加息风险的转变标志着心态的重大转变。但我敦促谨慎行事：不要假设国债市场对通胀的看法是正确的，更不用说剧烈波动的收益率只不过是对美联储计划的最佳猜测。</blockquote> But just as withthe taper tantrum of 2013, when investors start to price in Fed action, they can overdo it as everyone tries to adjust their portfolio to the new reality at once.<blockquote>但就像2013年的缩减恐慌一样，当投资者开始为美联储的行动定价时，他们可能会做得太过分，因为每个人都试图立即调整自己的投资组合以适应新的现实。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Confused by the Fed? So Are Markets<blockquote>被美联储搞糊涂了？市场也是如此</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nConfused by the Fed? So Are Markets<blockquote>被美联储搞糊涂了？市场也是如此</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nThe Wall Street Journal2021-06-22 19:13\n\n</h4>\n</header>\n<article>\n Swings in bond yields reveal deep confusion among investors about the Fed’s intentions and the strength of the post-pandemic recovery. The bond market is supposed to be the smart older cousin that keeps its head while the flighty stock market zooms about all over the place. Not so much in the past week.<blockquote>债券收益率的波动揭示了投资者对美联储意图和疫情后复苏力度的深深困惑。债券市场应该是聪明的表亲，在反复无常的股市到处乱跑时，它会保持冷静。过去一周没那么多。</blockquote> Instead of a calm response to the Federal Reserve’sslightly more hawkish tone, the 10-year yield first leapt by the most in months, then plunged. On Monday, it dropped during Asian trading hours to the lowest since February, before bouncing all the way back and then some.<blockquote>10年期国债收益率并没有对美联储稍微鹰派的语气做出冷静反应，而是首先出现数月来的最大涨幅，然后暴跌。周一，该指数在亚洲交易时段跌至2月份以来的最低水平，随后一路反弹，然后有所回升。</blockquote> The moves reveal deep confusion among investors about the Fed’s intentions and the strength ofthe post-pandemic recovery, as well as the extraordinary desperation for safe yields.<blockquote>这些举措揭示了投资者对美联储的意图和大流行后复苏的力度的深深困惑，以及对安全收益率的极度绝望。</blockquote> <img src=\"https://static.tigerbbs.com/e5911d5e0ad74414b1b88185c2769f99\" tg-width=\"336\" tg-height=\"410\">Before stock traders get too smug, bond-market volatility is mirrored by similar swings below the surface of the stock market.<blockquote>在股票交易者过于自鸣得意之前，债券市场的波动反映在股票市场表面之下的类似波动中。</blockquote> For me, the most extraordinary shift was the $235 billion depositedin the Fed’s reverse repurchase facilityafter it raised the rate it pays from zero to 0.05%, because it was concerned that it was losing control of the lower bound of rates.<blockquote>对我来说，最非同寻常的转变是美联储将利率从零提高到0.05%后存入逆回购工具的2350亿美元，因为它担心失去对利率下限的控制。</blockquote> This is a true tightening of monetary policy, not the mere technicality the Fed presented it as. For monetarists who care about the amount of money in circulation, in one day it drained reserves equivalent to two months of quantitative easing, and showed just how much cash is sloshing around the system looking for even the tiniest yield.<blockquote>这是真正的货币政策收紧，而不仅仅是美联储所说的技术性收紧。对于关心流通中货币数量的货币主义者来说，一天之内就耗尽了相当于两个月量化宽松的储备，并显示出有多少现金在系统中流动，寻求哪怕是最小的收益。</blockquote> For those, including me, who prefer to focus on the price of money, it is now higher—albeit not very much, it is a tightening. Secured overnight rates in the money market had been stuck on the floor of 0.01% since March, according to the New York Fed, with some borrowing at negative rates. It rose to 0.05% after the Fed’s announcement, and negative rates vanished.<blockquote>对于包括我在内的那些更喜欢关注货币价格的人来说，现在的价格更高了——尽管不是很高，但这是一种紧缩。根据纽约联储的数据，自3月份以来，货币市场的担保隔夜利率一直停留在0.01%的下限，一些借款利率为负。美联储宣布后升至0.05%，负利率消失。</blockquote> <img src=\"https://static.tigerbbs.com/1707a50e4704c3c16d8d2eac7a0204f9\" tg-width=\"317\" tg-height=\"419\">After the initial volatility, the bond market’s considered reaction was in the right direction for tighter policy: Higher short-term real rates reduced the longer-term inflation threat and so led to lower 10-year and 30-year Treasury yields—until the reflation trade returned on Monday. Higher rates pulled down stocks most sensitive to the economy—cyclicals and cheap value stocks—until Monday’s reverse. Growth stocks did fine thanks to lower long-term rates, before lagging on Monday.<blockquote>在最初的波动之后，债券市场经过深思熟虑的反应朝着收紧政策的正确方向发展：短期实际利率上升降低了长期通胀威胁，从而导致10年期和30年期国债收益率下降——直到通货再膨胀交易于周一回归。利率上升拖累了对经济最敏感的股票——周期性股票和廉价价值股票——直到周一出现逆转。由于长期利率较低，成长型股票表现良好，但周一表现落后。</blockquote> Yet, 0.05% is a very small tightening, to put it mildly. Usually, the Fed moves in 0.25-percentage-point increments, so this was equivalent to one-fifth of a normal rate increase. What mattered for Treasurys wasn’t the immediate shift in the price of money, but the prospect of a bigger change by the Fed.<blockquote>然而，温和地说，0.05%是一个非常小的紧缩。通常，美联储的加息幅度为0.25个百分点，因此这相当于正常加息的五分之一。对美国国债来说，重要的不是货币价格的立即变化，而是美联储做出更大改变的前景。</blockquote> <img src=\"https://static.tigerbbs.com/4bacd47e561e9d7ffdb95d180913fadf\" tg-width=\"321\" tg-height=\"418\">Much of the focus was on the “dots,” the projections of individual Fed policy makers. The median prediction for 2023 was for two 0.25-point increases that year, having previously been for no move. Again, in normal times this wouldn’t be terribly significant, as the predictions aren’t binding, have been a terrible guide to future policy and anyway are still two years away. They were even dismissed by Fed Chairman Jerome Powell in his news conference on Wednesday.<blockquote>大部分焦点都集中在“点”上，即美联储个别政策制定者的预测。对2023年的预测中值是当年上涨两次0.25个百分点，而此前没有变动。同样，在正常情况下，这不会有太大的意义，因为这些预测没有约束力，对未来的政策来说是一个糟糕的指南，而且无论如何还有两年的时间。他们甚至在周三的新闻发布会上被美联储主席杰罗姆·鲍威尔驳回。</blockquote> <img src=\"https://static.tigerbbs.com/e5df90890ee96402b8d5375020d3c135\" tg-width=\"353\" tg-height=\"454\">The reason the market cared so much isn’t the specifics, but the shift in tone from super-dovish to a hint of hawk. St. Louis Fed President James Bullard emphasized this—and the market moved further—on Friday when he said the first increase could even come next year. Seven of the 18 dots had one or two rises penciled in for 2022, so the news here was merely that Mr. Bullard was one of them.<blockquote>市场如此关心的原因不是细节，而是基调从超级鸽派转变为一丝鹰派。圣路易斯联储主席詹姆斯·布拉德周五强调了这一点，市场进一步上涨，他表示首次加息甚至可能在明年到来。18个点中有7个在2022年有一两次上涨，所以这里的消息只是布拉德先生是其中之一。</blockquote> Having previously been careful not to say anything that could possibly be interpreted as worrying about inflation, the Fed suddenly seemed to be concerned.<blockquote>美联储此前一直小心翼翼地不说任何可能被解读为担心通胀的话，但现在似乎突然感到担忧。</blockquote> We will have to wait for more from Mr. Powell and other Fed members to find out if this is the interpretation they wanted. They might well be taken aback by the scale of the market moves, which on Friday briefly pushed five-year Treasury yields—the base for much corporate borrowing—up to where they stood in February last year, before the first lockdown. It wouldn’t surprise me if Mr. Powell tries to talk the market back.<blockquote>我们将不得不等待鲍威尔先生和其他美联储成员的更多信息，以了解这是否是他们想要的解释。他们很可能会对市场走势的规模感到惊讶，周五，市场走势短暂将五年期国债收益率（许多企业借款的基础）推高至去年2月第一次封锁前的水平。如果鲍威尔先生试图说服市场，我不会感到惊讶。</blockquote> The problem is that investors are supersensitive to the Fed’s views. They think the real economy will be hit much harder than it usually is by higher rates. The Fed also has spent the past year convincing investors that low rates are here pretty much forever.<blockquote>问题是投资者对美联储的观点超级敏感。他们认为实体经济将因利率上升而受到比通常更严重的打击。美联储还在过去一年里让投资者相信低利率几乎永远存在。</blockquote> The threat of higher rates holding back the economy pushed investors toward the post-2010 playbook, at least for a few days: Buy long-dated bonds, buy Big Tech and other growth stocks, steer clear of anything dependent on a strong expansion.<blockquote>利率上升阻碍经济发展的威胁促使投资者转向2010年后的策略，至少在几天内是这样：购买长期债券，购买大型科技股和其他成长型股票，避开任何依赖强劲扩张的股票。</blockquote> The shift from thinking there is no risk of rate rises to thinking there is some risk of increases marks a major change of mindset. But I urge caution: Don’t assume the Treasury market is right about inflation, let alone that the wildly swinging yield is anything more than a best guess at what the Fed plans.<blockquote>从认为不存在加息风险到认为存在一定加息风险的转变标志着心态的重大转变。但我敦促谨慎行事：不要假设国债市场对通胀的看法是正确的，更不用说剧烈波动的收益率只不过是对美联储计划的最佳猜测。</blockquote> But just as withthe taper tantrum of 2013, when investors start to price in Fed action, they can overdo it as everyone tries to adjust their portfolio to the new reality at once.<blockquote>但就像2013年的缩减恐慌一样，当投资者开始为美联储的行动定价时，他们可能会做得太过分，因为每个人都试图立即调整自己的投资组合以适应新的现实。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.wsj.com/articles/confused-by-the-fed-so-are-markets-11624352991\">The Wall Street Journal</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite",".DJI":"道琼斯","SPY":"标普500ETF"},"source_url":"https://www.wsj.com/articles/confused-by-the-fed-so-are-markets-11624352991","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1152615512","content_text":"Swings in bond yields reveal deep confusion among investors about the Fed’s intentions and the strength of the post-pandemic recovery.\n\nThe bond market is supposed to be the smart older cousin that keeps its head while the flighty stock market zooms about all over the place. Not so much in the past week.\nInstead of a calm response to the Federal Reserve’sslightly more hawkish tone, the 10-year yield first leapt by the most in months, then plunged. On Monday, it dropped during Asian trading hours to the lowest since February, before bouncing all the way back and then some.\nThe moves reveal deep confusion among investors about the Fed’s intentions and the strength ofthe post-pandemic recovery, as well as the extraordinary desperation for safe yields.\nBefore stock traders get too smug, bond-market volatility is mirrored by similar swings below the surface of the stock market.\nFor me, the most extraordinary shift was the $235 billion depositedin the Fed’s reverse repurchase facilityafter it raised the rate it pays from zero to 0.05%, because it was concerned that it was losing control of the lower bound of rates.\nThis is a true tightening of monetary policy, not the mere technicality the Fed presented it as. For monetarists who care about the amount of money in circulation, in one day it drained reserves equivalent to two months of quantitative easing, and showed just how much cash is sloshing around the system looking for even the tiniest yield.\nFor those, including me, who prefer to focus on the price of money, it is now higher—albeit not very much, it is a tightening. Secured overnight rates in the money market had been stuck on the floor of 0.01% since March, according to the New York Fed, with some borrowing at negative rates. It rose to 0.05% after the Fed’s announcement, and negative rates vanished.\nAfter the initial volatility, the bond market’s considered reaction was in the right direction for tighter policy: Higher short-term real rates reduced the longer-term inflation threat and so led to lower 10-year and 30-year Treasury yields—until the reflation trade returned on Monday. Higher rates pulled down stocks most sensitive to the economy—cyclicals and cheap value stocks—until Monday’s reverse. Growth stocks did fine thanks to lower long-term rates, before lagging on Monday.\nYet, 0.05% is a very small tightening, to put it mildly. Usually, the Fed moves in 0.25-percentage-point increments, so this was equivalent to one-fifth of a normal rate increase. What mattered for Treasurys wasn’t the immediate shift in the price of money, but the prospect of a bigger change by the Fed.\nMuch of the focus was on the “dots,” the projections of individual Fed policy makers. The median prediction for 2023 was for two 0.25-point increases that year, having previously been for no move. Again, in normal times this wouldn’t be terribly significant, as the predictions aren’t binding, have been a terrible guide to future policy and anyway are still two years away. They were even dismissed by Fed Chairman Jerome Powell in his news conference on Wednesday.\nThe reason the market cared so much isn’t the specifics, but the shift in tone from super-dovish to a hint of hawk. St. Louis Fed President James Bullard emphasized this—and the market moved further—on Friday when he said the first increase could even come next year. Seven of the 18 dots had one or two rises penciled in for 2022, so the news here was merely that Mr. Bullard was one of them.\nHaving previously been careful not to say anything that could possibly be interpreted as worrying about inflation, the Fed suddenly seemed to be concerned.\nWe will have to wait for more from Mr. Powell and other Fed members to find out if this is the interpretation they wanted. They might well be taken aback by the scale of the market moves, which on Friday briefly pushed five-year Treasury yields—the base for much corporate borrowing—up to where they stood in February last year, before the first lockdown. It wouldn’t surprise me if Mr. Powell tries to talk the market back.\nThe problem is that investors are supersensitive to the Fed’s views. They think the real economy will be hit much harder than it usually is by higher rates. The Fed also has spent the past year convincing investors that low rates are here pretty much forever.\nThe threat of higher rates holding back the economy pushed investors toward the post-2010 playbook, at least for a few days: Buy long-dated bonds, buy Big Tech and other growth stocks, steer clear of anything dependent on a strong expansion.\nThe shift from thinking there is no risk of rate rises to thinking there is some risk of increases marks a major change of mindset. But I urge caution: Don’t assume the Treasury market is right about inflation, let alone that the wildly swinging yield is anything more than a best guess at what the Fed plans.\nBut just as withthe taper tantrum of 2013, when investors start to price in Fed action, they can overdo it as everyone tries to adjust their portfolio to the new reality at once.","news_type":1,"symbols_score_info":{".IXIC":0.9,".DJI":0.9,"SPY":0.9,".SPX":0.9}},"isVote":1,"tweetType":1,"viewCount":213,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":25,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/129146932"}